Illinois State Alums Reel in a Whale on ABC's 'Shark Tank'
None other than self-made billionaire Mark Cuban agrees to plop down $250,000 on a Chicago startup team's digital textbook rental biz.
There was a loud screening party going on at Chicago's 1871 tech skunk works to watch whether Illinois State alums Kasey Gandham and Mike Shannon could convince one of the five tycoons of ABC's Shark Tank to get on deck and fund their textbook rental outfit Packback Books. (The other founder, classmate Nick Currier, was absent.)
From undergrad to post-doc, every student is intimately, nay, painfully, acquainted with the outrageous prices for a textbook load. These guys created a workaround: How about renting textbooks on a day-to-day basis, priced less than a frappuccino and delivered on-demand? An idea with legs.
The startup already has 3,800 users at 46 colleges nationwide and added over 2,000 titles to its digital library since its fall 2013 beta launch. This simple idea is hitting a post-traumatic book budget nerve: students spend literally thousands and, on resale, never recoup the sticker price. According to USA Today, a Shark Tank producer said she booked the entrepreneurs because she needed just this type of service while in college. (For a slice of before-and-after, read their behind-the-scenes prep for the episode.)
The team crushed it to an estimated audience of 7.5 million and bewitched "serial entrepreneur" Mark Cuban, the 55-year-old billionaire, take-no-prisoners darling of the venture capital world and owner of the Dallas Mavericks. Cuban, who has Magnolia Pictures and Landmark Theatres in his investment portfolio is, well, different, with a slice-and-dice attitude that splits the vote on his rather XXL-sized personality. (But we ask, can you name a team owner that would solicit design ideas for new uniforms from, you know, fans?) When he's wrong he admits it (witness the Facebook IPO). And if he's courting a tech company, pay attention.
“I like the concept,” Cuban told the co-founders during the pitch. “But 10 percent isn’t enough. I want you guys to come back to me and tell me what’s the most equity I can get. How and how much?” The result? Cuban is taking a bite to the tune of $250,000 and a 20-percent equity stake.
Chicago and Mark Cuban making tech whoopee? Yep, it's true.